WASHINGTON — The Treasury Department will propose on Monday that Congress give the Federal Reserve broad new authority to oversee financial market stability, in effect allowing it to send SWAT teams into any corner of the industry or any institution that might pose a risk to the overall system.

END

I would like to think that this is some sort of sick April Fools joke, but, alas they are serious! What happened to free markets?? This is the same blue-print as the now failed Bush Administration Preemptive Strike Foreign Policy. The notion that the "financial SWAT team" goons will muscle their way into the private dealings of an institution that THEY think poses a risk to THEIR fraudulent fiat money Ponzi scheme is frightening. Presumably fund managers will be secretly flown to detention centers where "water-boarding" will be allowed to extract critical information like where they are hiding their gold!

What about this little gem…

QUOTE

Under the Treasury proposal, Fed officials would be allowed to examine the practices and even the internal bookkeeping of brokerage firms, hedge funds, commodity-trading exchanges and any other institution that might pose a risk to the overall financial system.

END

What a peach! The FED SWAT team can raid any institution, hedge fund, exchange, and see what key investment positions are and then pass it along to Goldman Sachs who can then make a fortune trading against them as they did with the position data they had confidential access to during the LTCM bail out!!

If you think I am a little over the top consider this…

QUOTE

While the plan could expose Wall Street investment banks and hedge funds to greater scrutiny, it carefully avoids a call for tighter regulation.

END

So why would they want to have more scrutiny if they are not going to have tighter rules???? Hey, don’t pay any attention to the guys with the night vision goggles wandering around your office they just want to have a closer look at your financial dealings.

Is this designed to fix any problems for Joe and Jane America? Nope!...

QUOTE

The blueprint also suggests several areas where the S.E.C. should take a lighter approach to its oversight. Among them are allowing stock exchanges greater leeway to regulate themselves and streamlining the approval of new products, even allowing automatic approval of securities products that are being traded in foreign markets.

END

Oh! You mean like the self regulation of the mortgage industry that allowed mortgages for anyone with a pulse and the self regulation of the rating agencies that allowed a triple A rating for any re-packaged debt originated by someone with a pulse! And the re-packaged garbage instrument can be automatically approved as long as it is for export to some unsuspecting investor with a pulse overseas! That should help.

Here is the real killer quote from general Paulson

QUOTE

"I am not suggesting that more regulation is the answer, or even that more effective regulation can prevent the periods of financial market stress that seem to occur every 5 to 10 years," Mr. Paulson will say in a speech on Monday, according to a draft of the speech. "I am suggesting that we should and can have a structure that is designed for the world we live in, one that is more flexible."

END

A system that is flexible enough to allow the elite white collar thugs to break the law with impunity and the little guy to go to prison if he does the same thing is what Herr Uberfuhrer Paulson really means.

In the past two weeks, the Federal Reserve, long the guardian of the nation's banks, has redefined its role to also become protector and overseer of Wall Street.

With its March 14 decision to make a special loan to Bear Stearns and a decision two days later to become an emergency lender to all of the major investment firms, the central bank abandoned 75 years of precedent under which it offered direct backing only to traditional banks.

Inside the Fed and out, there is a realization that those moves amounted to crossing the Rubicon, setting the stage for deeper involvement in the little-regulated markets for capital that have come to dominate the financial world.

Leaders of the central bank had no master plan when they took those actions, no long-term strategy for taking on a more assertive role regulating Wall Street. They were focused on the immediate crisis in world financial markets. But they now recognize that a broader role may be the result of the unprecedented intervention and are being forced to consider whether it makes sense to expand the scope of their formal powers over the investment industry.

"This will redefine the Fed's role," said Charles Geisst, a Manhattan College finance professor who wrote a history of Wall Street. "We have to realize that central banking now takes into its orbit everything in the financial system in one way or another. Whether we like it or not, they've recreated the financial universe."

Weiterflug:.......The Fed has made a special lending facility -- essentially a bottomless pit of cash -- available to large investment banks for at least the next six months. Even if that program is allowed to expire this fall, the Fed's actions will have lasting impact, economists and Wall Street veterans said.

As they made a series of decisions over St. Patrick's Day weekend, Fed leaders knew that they were setting a precedent that would indelibly affect perceptions of how the central bank would act in a crisis. Now that the central bank has intervened in the workings of Wall Street banks, all sorts of players in the financial markets will assume that it could do so again.

Major investment banks might be willing to take on more risk, assuming that the Fed will be there to bail them out if the bets go wrong. But Fed leaders, during those crucial meetings two weeks ago, concluded that because the rescue caused huge losses for Bear Stearns shareholders, other banks would not want to risk that outcome.

More worrisome, in the view of top Fed officials: The parties that do business with investment banks might be less careful about monitoring whether the bank will be able to honor obscure financial contracts if they assume the Fed will back up those contracts. That would eliminate a key form of self-regulation for investment banks.

Fed leaders concluded that it was worth taking that chance if their action prevented an all-out, run-for-the-doors financial panic.

Those decisions were made in a series of conference calls, some in the middle of the night, against hard deadlines of financial markets' opening bells. Fed insiders are just beginning to collect their thoughts on what might make sense for the longer term.

"It has wrought changes far more significant than they were probably thinking about at the time," said Vincent Reinhart, a resident fellow at the American Enterprise Institute who was until last year a senior Fed staffer.

Whether there is a formal, legal change in the Fed's power over Wall Street or not, the recent measures, which were taken under a 1930s law that can only be exploited in "unusual and exigent circumstances," represent a massive departure from past practice.

The central bank was created in 1913 to prevent the banking crises that were commonplace in the 19th century. The idea was that the Fed would be a backstop, offering a limitless source of cash if people got the bright idea to pull all their money at once out of an otherwise sound bank.

In exchange for putting up with regulation from the Fed and requirements over how much capital they can hold, banks have access to the "discount window," at which they can borrow emergency cash in exchange for sound collateral. A bank might take deposits from individuals and make loans to people buying a house. Hedge funds do something similar: borrow money in the asset-backed commercial paper market and use it to buy mortgage-backed securities. But the bank has lots of regulation and access to the discount window; the hedge fund does not.

In recent decades, more of the borrowing and lending that was the sole province of banks has come to be done in more lightly regulated markets.

A decade ago, the nation's commercial banks had $4 trillion in credit-market assets, and a whole range of other entities -- mutual funds, investment banks, pensions, and insurance companies -- had about twice that much. Now, those other entities have about three times as many assets, based on Fed data.

Still, the Fed has resisted broadening its authority. On March 4, Fed Vice Chairman Donald L. Kohn told the Senate Banking Committee that he "would be very cautious" about lending Fed money to institutions other than banks or, as he put it, "opening that window more generally." The Fed did exactly that 12 days later.

The New York Fed said yesterday that investment firms have borrowed an average of $33 billion through that program in the past week.

The Fed has intervened in the doings of Wall Street in the past, but in limited ways. Most notably, in 1998, the New York Fed brought in heads of the major investment banks to cajole them into a coordinated purchase of the assets of the hedge fund Long-Term Capital Management, to prevent a disorderly sell-off that could have sent ripples through the financial world.

"Long-Term Capital was the dress rehearsal for what happened with Bear Stearns," said David Shulman, a 20-year veteran of Wall Street who is now an economist at the UCLA Anderson Forecast.

Treasury Secretary Henry M. Paulson Jr. said that if investment banks are given permanent access to the Fed's emergency funds, they should have the same kind of supervision that the Fed requires for conventional banks. "This latest episode has highlighted that the world has changed, as has the role of other non-bank financial institutions, and the interconnectedness among all financial institutions," he said in a speech Wednesday.

If Congress and the administration do broaden the formal powers of the Fed, it would be the latest in a long history of financial policy made out of a crisis. The Great Depression fueled an array of stock exchange regulation. The 1987 stock market crash led to curbs on stock trades. The 2002 corporate scandals led to the Sarbanes-Oxley Act.

And after the panic of 1907, a National Monetary Commission was formed to figure out how to prevent such things from happening again. Its crowning achievement: The creation of the Federal Reserve.

Comments:madmilker wrote:
This Act (the Federal Reserve Act, Dec. 23rd 1913) establishes the most gigantic trust on earth. When the President (Woodrow Wilson) signs the Bill, the invisible government of the Monetary Power will be legalised... The worst legislative crime of the ages is perpetrated by this banking and currency Bill.

Most Americans have no real understanding of the operation of the international money lenders... The accounts of the Federal Reserve System have never been audited. It operates outside the control of Congress and... manipulates the credit of the United States.

merci @narco
John Williams Interview 03/21/2008Here's an interview from the man who reconstructs the M3 data. John Williams talks about where things are heading.This was after the Bear Stearns bail out / Gold correction.

We were asked if we favor the Paulson plan. After all, several noted academic economists have come out and spoken in favor of it. Wall Street complains that it will increase regulation and lessen their profits. Well, Wall Street complains all the time, but especially loudly when it has been caught with its hand in the cookie jar, and some economists will say just about anything for some of the cookie crumbs. The Banks protested the adoption of the Federal Reserve Act in 1913 in much the same manner, with false protestations while they privately were promoting it by incenting endorsements from economists and politicians.

Treasury Secretary Paulson softened his delivery this morning by couching the plan in terms of just 'a template' and a 'basis for discussion.'

Its important to realize that this study had its genesis in a Bush Administration effort to lighten regulation on Wall Street that has been underway for some time. The Bush cabinet is taking the opportunity of the Bear Stearns collapse to quickly bring this forward under the title "Financial Stability Act" in much the same way they were able to quickly bring out the "Patriot Act" after the 911 tragedy.

The next Presidential Administration will have to live with the problems created by eight years of Bush mismanagement. It would be better to leave sweeping changes to them, rather than follow yet another blank check proposal from a group in Washington that have proven over and over that they cannot, or will not, do what is required to act in the public interest.

When you have a massive failure in a critical system, you do not go to those on whose watch it occurred, with their proactive involvement, with strong elements of deception and fraud involved, with innocent people being victimized, and ask them what should be done to fix the system so it doesn't happen again.

How many times can someone lie to you, and cheat you, and take some of the goodness of life from your children, before you wise up?

Not even a template. Not even a basis for discussion. No bonanza for the lobbying interests such as they had when the Banks went after the repeal of Glass-Steagall. And especially not something to distort and delay the real action that is required.

Are we in favor of this plan? No. Hell no.

It would be Congress and the president essentially giving a blank check to a regulator over which they have very little power,'' said Michael Greenberger, a professor at the University of Maryland in Baltimore and a former CFTC official. Paulson's proposal will ``allow Wall Street to do whatever they want until a crisis occurs, at which point the Fed would intervene.'' Bloomberg News

The Fed oversaw this meltdown,” said Michael Greenberger, a law professor at the University of Maryland who was a senior official of the Commodity Futures Trading Commission during the Clinton administration. “This is the equivalent of the builders of the Maginot line giving lessons on defense.”

"During the late 1990s, Wall Street fought bitterly against any attempt to regulate the emerging derivatives market, recalls Michael Greenberger, a former senior regulator at the Commodity Futures Trading Commission...“After that, all was forgotten,” says Mr. Greenberger, now a professor at the University of Maryland. At the same time, derivatives were being praised as a boon that would make the economy more stable.

Speaking in Boca Raton, Fla., in March 1999, Alan Greenspan, then the Fed chairman, told the Futures Industry Association, a Wall Street trade group, that “these instruments enhance the ability to differentiate risk and allocate it to those investors most able and willing to take it.” Although Mr. Greenspan acknowledged that the “possibility of increased systemic risk does appear to be an issue that requires fuller understanding,” he argued that new regulations “would be a major mistake.”

Mr. Greenberger, still concerned about regulatory battles he lost a decade ago, says that Mr. Greenspan “felt derivatives would spread the risk in the economy.”

“In reality,” Mr. Greenberger added, “it spread a virus through the economy because these products are so opaque and hard to value.” A representative for Mr. Greenspan said he was preparing to travel and could not comment."http://jessescrossroadscafe.blogspot.com/

I found much in this editorial in today’s WSJ to my liking. Perhaps it is a good read for the gang. Note the paragraph near the end that bolded. The editors seem to have the same feelings about the Fed buying up this junk as we do.

Best wishes amigo,
Dan

Reform a la GlasgowApril 1, 2008; Page A16

The financial reform unveiled yesterday by Treasury Secretary Hank Paulson is nothing if not comprehensive. No bureaucratic deck chair goes unmoved. Partly for that reason it has as much chance of becoming law as those Citigroup SIVs have of paying off for investors. Fortunately, the real reformer is already hard at work, changing the financial system right before our eyes.

His name is Adam Smith, and his relentless market discipline is already building a safer, more conservative financial system without any new regulation at all. For weeks now, structured-investment vehicles (SIVs), dodgy asset-backed commercial paper and the like have been moving onto bank balance sheets. Hedge funds are unwinding, or at least the riskier versions are. Derivative contracts are still being written, but more cautiously, and with more connection to the value of the underlying asset.

In short, the decade's great experiment in direct, unmediated lending is undergoing an Adam Smith cleansing. Amid the credit mania, Wall Street's whiz kids pioneered new ways to lend and make money without the intermediation of traditional bank capital. It was very efficient, raising money from all corners of the world, and its benefits were real. But it was also more vulnerable to panic because, if the value of the underlying assets fell, there was little cushion to absorb the losses. When the housing and mortgage mania stopped, so did the confidence in those SIVs and the panic set in.

In his wisdom, the Professor from Glasgow is now moving more of those direct-lending assets back on bank balance sheets where there is a capital safety net to write off the losses without busting the entire financial system. The ratio of direct to intermediated lending is falling, while the banks themselves are getting access to new liquidity, both private and public through the Federal Reserve's discount window. This by itself is an enormous reform, and all of it is taking place without a single vote in Congress.

Yet the politicians, in their typical election-year panic, now demand more power for the same regulators who failed to use the power they already have to prevent the current crisis. Mr. Paulson is proposing to consolidate some of the financial bureaucracy, and we're all for that. But the mortgage mania and panic weren't caused by a failure of the regulatory "structure" or a dearth of rules. They were caused by a failure of the men and women who ran those financial and regulatory institutions.

That's especially true at the Fed, which has the most to answer for in this entire episode. First, it drove a reckless monetary policy that created the subsidy for debt that fueled the housing and credit bubbles. Then it failed to call the banks under its supervision on the major risks they were taking. The Fed had every authority and tool it needed to scour Citigroup's balance sheet and question its lending practices, yet it failed to do so. And now, without a hint of irony, the Treasury and financial press declare that the solution is for the Fed to become a "Supercop." What do they think the Fed was supposed to become when it was created in 1913, after the Panic of 1907 -- a potted plant?

We agree that those investment banks now borrowing for the first time from the Fed's discount window are opening themselves to greater supervision. With the taxpayer's dime comes the burden of oversight. Among other things, this is likely to mean lower debt ratios than the 34-1 that helped kill Bear Stearns. But the best way to accomplish that is for the Fed to use the considerable power it already has rather than run a Congressional gauntlet that will surely make things worse. If Goldman Sachs or Lehman object to new reporting demands, the Fed can always deny them access to the discount window.

What will our new financial system look like once Professor Smith is done? It will be smaller for one thing, but perhaps safer. Securitization -- packaging assets and then selling them as securities -- will continue, though with more discipline. The system will be less efficient, and that's regrettable. But it may also be sturdier -- with a greater capital cushion, less leverage and better risk management -- and thus better able to ride out the next financial rough patch.

Or at least it will be if the Beltway doesn't pile on another dose of moral hazard. That's what the Fed did this month by guaranteeing that $30 billion in Bear Stearns mortgage paper for J.P. Morgan. As Yale's Jonathan Macey wrote on these pages yesterday, that action was a commitment of taxpayer dollars that almost certainly violated the Federal Deposit Insurance Improvement Act. If the government is going to commit taxpayer money to rescue banks, the proper vehicle is the FDIC. The Federal Reserve needs to maintain the quality of its balance sheet as a lender of last resort and to conduct monetary policy. Rather than rearrange the bureaucratic furniture, Congress could better spend its time digging into the Fed's Bear Stearns deal.

Wall Street's motto is "Never Give Up. Never Surrender. Greed is only a few heartbeats away from fear."

Banks are leading the rally on first of month 401k money from the US, hopes that the banks have or are reaching a bottom by European speculators based on the Lehman shares offering raising $4 billions, a quick pump from the Yen-dollar carry trade, the apparent revelation that the Treasury has agreed to backstop any Bear Stearns losses for the Fed, and... a little fresh lipstick.

Banks Face Biggest Crisis in 30 Years, Report SaysBy Edward Evans

April 1 (Bloomberg) -- Credit market turmoil poses the most severe crisis for banks in 30 years, surpassing Black Monday in 1987, the Asia currency crisis and the burst of the dot-com bubble, Morgan Stanley and Oliver Wyman said in a joint report.

Revenue from investment banking may drop 20 percent in 2008 before a further $75 billion in markdowns, analysts led by Huw van Steenis said in a note to clients today. Six quarters of earnings will have been erased by writedowns and falling revenue by this month, rivaling the collapse of the junk bond market at the end of the 1980s that put Drexel Burnham Lambert Inc. out of business, the report said.
''The industry is facing the most severe investment banking crisis in 30 years,'' the analysts wrote in the report. ''Global securities markets are in the midst of profound cyclical and structural change.''

Banks' revenue from their credit businesses may drop as much as 60 percent, the analysts said, and the firms will have to provide more transparency to investors who buy their loans. At the same time, regulators will push the industry to retain more capital as a cushion, hurting banks' return on equity in the long-term, the group added.

Banks' earnings have been hit for the past three quarters by the turmoil in the credit markets, the report said. In total, the crisis may last for eight to 10 quarters, exceeding the six- quarter duration of the Asia crisis and bailout of LTCM in 1997- 8, and the seven-quarter fallout from the bursting of the dot- com bubble, the report said.

Investment-banking revenue has also stalled as the pace of takeovers and initial public offerings declined in the first quarter of 2008. Writedowns and losses on subprime-infected assets have already cost the world's biggest financial institutions about $230 billion since the start of 2007.

Zurich-based UBS AG today posted an additional $19 billion of writedowns and said it would seek $15.1 billion in a rights offering to replenish capital. Deutsche Bank AG, Germany's biggest bank, also said today it expects to book about 2.5 billion euros ($3.9 billion) in writedowns for the quarter.

Separately, Merrill Lynch & Co. and Citigroup Inc. had their first-quarter earnings estimates cut by Goldman Sachs Group Inc., which said the two banks may post $14 billion in writedowns on assets linked to collateralized debt obligations.http://jessescrossroadscafe.blogspot.com/

Jive DadsonI did that too. There's one with Bernanke and four other fools on the committee, but I haven't found Ron Paul.Democratic Senator Charles Schumer of New York, Republican Senator Sam Brownback of Kansas, Democratic Representative Carolyn Maloney of New York and Republican Representative Kevin Brady of Texas also speak.

***************************************

Dunany
Hmmm, you're right. Looks like they cut out RPs questions. It should turn up on youtube later today.

You might want to read the following article on the recent actions of the Fed, JP Morgan and Bear Stearns. It is a bit lengthy but well worth the read.

Pay particular attention to the closing two paragraphs. They sum up this unique situation perfectly.

Bear with Me
The mother of all government bailouts.(Excerpts from article)
By David Freddoso

"In short, this is the mother of all government subsidies a non-legislative appropriation that doubles the size of all this year’s congressional pork projects combined. Without so much as a vote of Congress, taxpayers are to buy securities of undetermined value for $29 billion - roughly Panama’s GDP, or the Federal Reserve Bank’s entire annual profit. They take this enormous risk so that JPM, a company worth $146 billion, has enough liquidity to make a major and profitable acquisition for next to nothing. JPM is more than happy to take on Bear’s book of client and counterparty accounts - these were probably never in danger of being lost, and its great business for JPM. The ones being rescued are Bear’s bond-holders. They keep their shirts. The stockholders at least keep their socks. The profits from the good times are retained, and the losses are socialized.

Finally, the CRS report notes, the bailout creates an excuse for further regulation of Wall Street. After all, if these firms are going to rely on the Fed to bail out their bondholders, they should be more responsible to the government:
[I]f financial institutions can receive some of the benefits of Fed protection, perhaps because they are “too big to fail,” should they also be subject to the costs that member banks bear in terms of safety and soundness regulations, imposed to limit the moral hazard that inevitably results from Fed and FDIC (Federal Deposit Insurance Corporation) protections? If so, should the “too big to fail” label be made explicit so that regulators can better manage systemic risks?

The taxpayer’s involuntary generosity also benefits the other large institutional holders of mortgage-backed securities. For these, the bailout holds forth hope that the government will someday be there to save them from the free market as well. But can it save everyone?"

If you listened carefully there was much to be heard at today's Fed testimony.

The primary reason for funding the Bear/JPM deal was to prevent Chapter 11 for Bear. In Chapter 11 Bear would be released from its liabilities with residual assets distributed.

That would mean that the specific performance obligations required of Bear on the structured products they were principle to (their inventory) would no longer be obligatory as that is a liability discharged.

That would mean not only the $30 billion going publicly up in smoke, but the entire web of obligations written against them would also go up with it.

That smoke would take the form of a financially nuclear mushroom cloud. It is estimated that thousands of counter-parties would be engulfed in that mushroom cloud of financial destruction.

No major investment bank, insurance company or other financial entity which has major commitments in the OTC derivative market will be allowed to go Chapter 11. This will cost the Fed huge amounts of money - well beyond what you have seen so far.

The Fed balance sheet will become garbage on the asset side with growing and in most cases undetermined liabilities. Central banks cannot go broke as they have a blank check they can use to print all the funds required. What a central bank can do is DESTROY THE CURRENCY they represent. The tool for that destruction is a combination of inflation and balance sheet deterioration, the path we are now clearly on.

There is so much more to come that there is no respite here.

Gold is headed to $1650 and the US dollar to .5200 on the USDX.

Note the currency from the Weimar Republic: (Click image to enlarge in PDF format)

Review of the Testimony:

Soros was quoted today (not in this meeting) as predicting the next major problem emanating from the companies that have issued credit default derivatives (swaps) so far beyond their capacity to perform (45 trillion US dollars worth according to the WSJ) that it borders on comical. I wholly concur, but believe this is already in place, albeit just starting. A downgrade of the credit worthiness character of the issuers (credit default swaps) bonds would trigger an opening of the flood gates. Not downgrading those bonds will end the existence of the credit rating firms via civil litigation. AAA credit rating for entities with trillions of dollars of guarantees with now modest capitalization stretches the imagination of any financial Pollyanna.

The subject of the action of a bankruptcy judge as it applies to OTC derivatives was opened. It got slammed shut fast by the Fed, saying this was not a relevant subject as no bankruptcy occurred.

It was stated that the Federal Reserve assumed the risk of the derivatives at the point to which Bear Stearns had marked them to model on the day of the transaction. The question that remains is what was the mark to model that Bear Stearns in fact has marked their position as counterpart to SIVs?

The question was asked of the Federal Reserve when they knew that Bear Stearns was in trouble. The answer was that they know Bear Stearns faced Bankruptcy one day before the transaction weekend. It was made clear that the Fed was not the supervisor of Bear. Actually, no one was in the situation of OTC derivatives and their valuation supported by the Fed in their commentary on regulations and derivatives on many occasions. There is a distinct difference between when you know an entity is in trouble to knowing that they are going to have to file Chapter 11.

As always, the problem being examined is directed at the mortgages themselves. The structure of the OTC derivative market, its lack of regulations, Fed blessing of no regulations and all other characteristics is not in the scope of discussion.

This is the beginning of a politicized discussion of the valuation by computer models as asked by Mr. Tester. The question is who valued Bear’s portfolio and the answer is of course Bear. If you were using a voice analyzer, I believe the answer to the question, “Are Bear’s derivatives worth $29 billion?” would show the Chairman begin stuttering. The question to follow this is why did JP Morgan require a $29 billion guarantee if the items had a good value of $29 Billion? The answer again would be stuttering. The answer to the question “What does highly rated mean?” is “No firm guarantee.”

It became clear that the reason Bear could not file chapter 11 is that would legally result in assuring the counter party of the special performance contract that must perform ( Bear - the loser) would never perform, making the entire web of OTC derivatives issued against those instruments BANKRUPT. This is why JPM would not take on more than the first billion with the Fed, now the performing party on the balance of the $29 billion. This is the real heart of the situation.

Questions were asked of the Fed regarding how they would stand in civil litigation over the transactions formulated by the Fed. My comment is good luck suing the government (or quasi government) organization. That question is quite relevant where Bear, JPM, Credit rating companies and all those involved in OTC derivatives are concerned. What has not occurred to the investment banks, insurance companies, retirement funds and all those entities trying to maximize interest via guaranteed debt and derivatives thereupon, litigation will. Will the Fed assume the litigation losses for protection of the financial entity if it threatens chapter 11? The answer is probably YES.